Richard Cowart: Health exchange website bogged by bureaucracy

Oct. 30, 2013

Marilyn Tavenner, the administrator of the Centers for Medicare and Medicaid Services, goes over her notes on Capitol Hill in Washington on Tuesday, Oct. 29, 2013, prior to testifying before the House Ways and Means Committee hearing on the implementation of the Affordable Care Act. Stressing that improvements are happening daily, the senior Obama official closest to the administration's malfunctioning health care website apologized Tuesday for problems that have kept Americans from successfully signing up for coverage. / Evan Vucci / Associated Press

Written by

Richard Cowart

Buying health insurance on a website appears to be simple. We can buy airline tickets, books and even made-to-order clothes online. If we can operate so efficiently on the Web, what is behind the massive failure of the Affordable Care Act health exchange website? Let’s start with the nature of the problem.

The pride of our federal government is the Department of Defense. Four branches: Army, Navy, Air Force and Marines, separate functions. Fiercely independent. On occasion, highly competitive. They share common headquarters in the Pentagon and a common leadership in the commander in chief and Joint Chiefs of Staff.

A 40-year conundrum of this great military is creating a computerized, integrated payroll system for its 2.7 million employees. There have been efforts for decades to perform what seems to most business observers as the most elementary of tasks. However, it has yet to be accomplished.

In 2009, after more than 10 years of development and more than $1 billion in taxpayer funds, the Department of Defense pulled the plug on its latest attempt. Instead, the department allowed each of the branches to separately update its own payroll system.

The issue is not the scope and scale of computer systems, or the competency of the Department of Defense tech squad. The issue is that in integrating the pay system, the branches would lose their individual authority and autonomy. In government, protecting one’s turf can be as important as protecting the homeland. Once your borders are breached, what happens next is rarely favorable.

Discrete agencies

The ACA, or “Obamacare,” website faces this same challenge. Each visitor is treated as an applicant. To be an applicant, the visitor must complete an application, which includes citizenship verification (from the Department of Homeland Security), tax status verification (from the Internal Revenue Service), Medicaid eligibility (from the Centers for Medicare and Medicaid Services) and eligibility for other government benefits (from the Department of Veteran Affairs and Office of Personnel Management). Each of these federal agencies operates on a separate computer platform, and the platforms are not integrated.

The unprecedented challenge for the health insurance exchanges was to create a massive data dump that allows seamless access to current and past multi­agency information. Only through this complex interface can applicants complete the application, work the tax credit calculator and determine whether they wish to purchase health insurance. Imagine if Amazon required this process before you could buy a book.

It is somewhat ironic that most of the bad news about the federal exchange has focused on the Canadian company CGI. Our neighbor to the north, Kentucky, is running its own exchange and is performing quite well, enrolling about 1,000 individuals per day for health insurance. At last count, Kentucky enrolled more people than all 26 states covered by the federal exchange.

Yet the Kentucky exchange, like the federal exchange, was designed by CGI. While these numbers are small in comparison to the expectations, it suggests that the states have far greater experience than the federal government in the actual delivery of service. We will ultimately get the facts, but I suspect the issue here is as much the Obama administration as it is the private contractor.

The word, “government” has its roots in a Greek word that means “to steer.” As we have seen from the first month of Obamacare, the most effective role of government is to steer, not to row. Delivering services is rowing, and the federal government, by its nature, is not very good at that task.

A great business example is our securities markets. The Securities and Exchange Commission is an arm of government that sets the rules by which all must play. However, the New York Stock Exchange is a private enterprise and works by classic market forces. As we embark on this new path of well-intentioned national health reform, it is important that we respect the strengths and weaknesses of our public and private institutions.

I am confident the Obama administration will find a solution to the website issues. There is too much at stake for that not to occur. However, I hope the administration also learns a lesson that perhaps the government functions best by setting the rules and then stepping back and letting American free enterprise do what it does best.

Richard Cowart is chairman of the health law and public policy departments at Baker Donelson. Reach him at dcowart@bakerdonelson.com.